Your Unique Selling Proposition:
The Difference Between Hype and Performance
by Coach Bob Williamson
“If [you] can … make a better mousetrap than your neighbor, … the world will make a beaten path to your door.”
Ralph Waldo Emerson
“If [you] can … make a better mousetrap than your neighbor, … the world will make a beaten path to your door.”
Ralph Waldo Emerson
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Most originators understand (conceptually at least) that in order to increase market share in a competitive marketplace, you must offer something of relatively high-perceived value to the consumer, something the consumer would not expect to get from your competitors.
But most originators don’t act on that understanding. And many of those who do act on it get hung up trying to appeal to the consumer’s perception of value, while completely ignoring the actual value of the service they provide. In other words, they’re concentrating on the hype, rather than on their performance. Which is a shame, because with some creative-out of the box thinking and a little focused effort, you could actually deliver on a promise big enough to convince most serious prospects that you are unquestionably the best lender for them! The Prospective Homebuyer is undoubtedly one of the most crucial market segments for a mortgage lender. These are the people who, by definition, have not yet signed a purchase agreement but who will be buying a home (new or resale) some time in the next 12 months. When I first started coaching loan originators, the “Prequal” (using only borrower-supplied information to determine what a buyer could borrow) was the hot marketing concept of the day. Today many lenders offer a “PreApproval”, where the customer’s credit is actually underwritten and approved subject to a property. Most lenders are now able, thanks to automated underwriting, to offer the possibility of virtually instant preapprovals. These innovations are all inside-the-box improvements on the initial Prequal idea, which was a response to consumer demand for reliable information about what they could afford before they went out and made an offer on that dream home. There is nothing wrong with inside-the-box improvements. But have you noticed how many of your competitors were able to provide those improvements around the same time you were? See, they are all thinking inside the box too! If we wanted to think outside of the box, we might begin by asking ourselves this key question:
Okay, that was more than one question. But the point is, if the only question on your mind as an LO is how to get more business for yourself, it might never occur to you to ask what unmet need you might be able to resolve for your customer. What’s your priority? If your priority is getting more business, your energy will be focused on “what to say to get ‘em in” and your sales & marketing approach will be characterized by gimmicks and flowery but vague promises about your service. On the other hand, if your priority were to find breakthrough ways of serving your clients, a natural result of accomplishing that is you’d have all the business you could handle! This is the difference between hype and performance. Every year, the NAR commissions a nationwide survey of homebuyers to measure their level of satisfaction with the service provided by Realtors. One finding that consistently shows up should get your attention: “Of greater concern to the homebuyers surveyed was the lack of incentive for a [Realtor] to negotiate the best possible sales price. The buyer cares most about getting the lowest price, while the perception is that the salesperson is motivated to complete the transaction and be paid a commission based on the final price.” (Emphasis added) The Buyer cares most about getting the lowest price, but Realtors on both sides of the transaction are almost universally working for a commission – based on the final sales price and paid by the Seller. It doesn’t take a genius to figure out that the higher the sale price, the higher the commission, or to understand that if the offer is so low it is rejected outright by the Seller, there will be no commission at all – so where’s the Realtor's incentive to negotiate the lowest possible price for the Buyer? I would argue that the Buyer is the most under-represented party in a residential real estate transaction. Most buyers are actually in a much better negotiating position than they realize, but they don’t have the information that would allow them to capitalize on that strength.
Meanwhile, back in your market, Realtors are telling your loan prospects that they should shop the mortgage companies to get the best deal. And you loan officers are out there scrapping and clawing and killing each other over a few hundred dollars difference in closing costs! |
Let me be even clearer: many Realtors will encourage their buyers to "shop" several lenders in order to get the best deal on a mortgage. You and I know very well that this difference in the bottom-line cost of the loan is unlikely to be more than a few hundred dollars between reputable lenders. Meanwhile, Realtors and lenders alike are completely ignoring the opportunity to help a homebuyer save thousands of dollars by being more careful and intelligent about the price they agree to pay for the house in the first place. The interest savings alone in the modest example I just gave is 10 times what a borrower would be likely to save by shopping lenders.
What you really want to do is help your prospective Buyer clients do a better job of negotiating the purchase price of their home. That’s where the real money gets saved. If you can do that, you will earn loyalty that will not only transcend competitive differences in loan pricing, but will also position you as a trusted financial advisor. If you stay in touch, they will never go anywhere else for a mortgage loan, and they will recommend you to their friends. How to Help Your Clients Negotiate the Lowest Possible Price for the Home They Buy Most lenders realize they must offer the consumer some kind of Unique Selling Proposition [USP] in order to distinguish themselves from the competition. Unfortunately, too many of us get hung up on the hype (how we market ourselves; the message) and pay little attention to our performance (the actual value of the service we offer our clients). We also know that the homebuyer cares most about getting the lowest price, but that Realtors on both sides of the transaction are almost universally working for a commission – based on the final sales price and paid by the Seller. The higher the sale price, the higher the commission, and without an offer that is acceptable to the Seller, there will be no commission at all – which creates an environment in which the real estate agent has no incentive to negotiate the lowest possible price for the Buyer. I might add that there is nothing wrong with that – in a free market economy, you “dance with the one what brung you,” and for the Realtors involved in the transaction, that’s the Seller. This is simply the way the system works; it works quite well for Sellers, and to complain about it is pointless. Instead, I’d like to draw your attention to the opportunity for the enterprising mortgage lender to fill the void left by the fact that no one is truly representing the Buyer’s interests in the price-negotiating aspect of the home purchase process. If you can fill that void, you will be giving your homebuyer prospects an absolutely compelling reason to do business with you – and even if your competitors down the street have better loan pricing, they’re still not going to be able to match the bottom-line savings you help your clients obtain! I’m not suggesting that you get personally involved in negotiating real estate contracts for your clients. I am suggesting that, as part of your initial consultation with the client, instead of focusing exclusively on the loan, you provide balanced information that helps your clients understand some of the practical things they can do to protect themselves and improve the strength of their position when it comes time to negotiate the price of a home. How to Use This USP to Market Yourself to Homebuyers A Unique Selling Proposition (USP) in which you position yourself as a Homebuyer Coach – someone who coaches homebuyers to be more savvy, better informed, stronger negotiators, and focused on buying the right home for the lowest possible price – such a USP enables you to clearly distinguish yourself from virtually all of your competition in your local market. While your competitors are quibbling over minor differences in the services they provide, their products and pricing, and other relatively minor issues, what you are saying to your potential clients is that you "get it" about what is truly most important to them. (It's not that you don't also provide good pricing, products, and services – it's that you provide so much more.) This message, this USP, is then incorporated into everything you do to promote yourself. It's part of your lead generation efforts, it's part of the first conversation that you have with a prospect or lead, and most importantly, it is backed up by your actions every time you interact with your clients. Unquestionably it will take some effort, some time and some research in order to be able to competently advise homebuyer clients on the ways in which they can help themselves negotiate a lower price for the home they buy. Some loan originators would rather look for the magic marketing techniques and the quick fixes. But if you think about it, that is the difference between hype and performance. |
Bob Williamson is a trainer and personal coach whose clients include some of the mortgage industry’s top producers.
Copyright 2012, Robert Williamson. All rights reserved.
Copyright 2012, Robert Williamson. All rights reserved.